Appendix D Mark Hodgson Associate Partner Ernst & Young LLP - - PDF document

Appendix D Mark Hodgson Associate Partner Ernst & Young LLP One Cambridge Business Park Cowley Road Cambridge CB4 0DZ St Edmundsbury Borough Council - Audit for the year ended 31 March 2019 On 1st April 2019, Forest Heath District Council and St Edmundsbury Borough Council were abolished and replaced by West Suffolk Council. The Local Government (Boundary Changes) Regulations 2018 transferred functions, property, rights and liabilities, and continuity of decisions to the new successor council. Under the legislation, West Suffolk Council has responsibility to prepare and publish the final accounts of its predecessor authorities. This representation letter is provided by West Suffolk Council in connection with the audit of the financial statements of St Edmundsbury Borough Council (‘the Council’) for the year ended 31 March 2019. We recognise that obtaining representations concerning the information contained in this letter is a significant procedure in enabling you to form an opinion as to whether the financial statements give a true and fair view

• f the financial position of the Council as of 31 March 2019 and of its

expenditure and income for the year then ended in accordance with the CIPFA LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2018/19 (“the CIPFA Code”). We understand that the purpose of your audit of our financial statements is to express an opinion thereon and that your audit was conducted in accordance with International Standards on Auditing (UK and Ireland), which involves an examination of the accounting system, internal control and related data to the extent you considered necessary in the circumstances, and is not designed to identify – nor necessarily be expected to disclose – all fraud, shortages, errors and other irregularities, should any exist. Accordingly, we make the following representations, which are true to the best of our knowledge and belief, having made such inquiries as we considered necessary for the purpose of appropriately informing

• urselves.
• A. Financial Statements and Financial Records
• 1. We have fulfilled our responsibilities, under the relevant statutory

authorities, for the preparation of the financial statements in accordance with the Accounts and Audit Regulations 2015 and the CIPFA Code.

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• 2. We acknowledge as members of management of the Council, our

responsibility for the fair presentation of the financial statements which, we believe, give a true and fair view of the financial position, financial performance and cash flows of the Council in accordance with the CIPFA Code and are free of material misstatements, including omissions. We have approved the financial statements.

• 3. We confirm that the Responsible Officer has:

 Reviewed the accounts;  Reviewed all relevant written assurances relating to the accounts; and  Made other enquires as appropriate.

• 4. We confirm that the significant accounting policies adopted in the

preparation of the financial statements are appropriately described in the financial statements.

• 5. As members of management of the Council, we believe that the

Council has a system of internal controls adequate to enable the preparation of accurate financial statements in accordance with the CIPFA Code, that are free from material misstatement, whether due to fraud or error.

• 6. We believe that the effects of any unadjusted audit differences,

summarised in your Audit Results Report, accumulated by us during the current audit and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the financial statements taken as a whole.

• B. Non-compliance with law and regulations, including fraud
• 1. We acknowledge that we are responsible to determine that the

Council’s activities are conducted in accordance with laws and regulations and that we are responsible for identifying and addressing any non-compliance with applicable laws and regulations, including fraud.

• 2. We acknowledge our responsibility for the design, implementation

and maintenance of internal controls to prevent and detect fraud.

• 3. We have disclosed to you the results of your assessment of the risk

that the financial statements may be materially misstated as a result of fraud.

• 4. We have no knowledge of any identified or suspected non-

compliance with laws or regulations, including fraud that may have affected the Council (regardless of the source or form and including without limitation, any allegations by “whistleblowers”), including non-compliance matters:  involving financial statements;  related to laws and regulations that have a direct effect on the determination of material amounts and disclosures in the Council’s financial statements;

Appendix D  related to laws and regulations that have an indirect effect on amounts and disclosures in the financial statements, but compliance with which may be fundamental to the operations of the Council’s activities, its ability to continue to operate, or to avoid material penalties;  involving management, or employees who have significant roles in internal controls, or others; or  in relation to any allegations of fraud, suspected fraud or other non- compliance with laws and regulations communicated by employees, former employees, analysts, regulators or others.

• C. Information Provided and Completeness of Information and

Transactions

• 1. We have provided you with:

 Access to all information of which we are aware that is relevant to the preparation of the financial statements such as records, documentation and other matters as agreed in terms of the audit engagement;  Additional information that you have requested from us for the purpose of the audit; and  Unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence.

• 2. We have recorded all material transactions in the accounting

records and reflected them in the financial statements.

• 3. We have made available all minutes of the meetings of the Council

and its relevant committees (or summaries of actions of recent meetings for which minutes have not yet been prepared) held through the year to the most recent meeting on the following date: 25 July 2019.

• 4. We confirm the completeness of information provided regarding the

identification of related parties and that we have disclosed the identity of the Council related parties and all the related party relationships and transactions of which we are aware, including sales, purchases, loans, transfers of assets, liabilities and services, leasing arrangements, guarantees, non-monetary transactions and transactions for no consideration for the period ended, as well as related balances due to or from such parties at the year end. We have appropriately accounted for and disclosed such relationships and transactions in the financial statements.

• 5. We believe that the significant assumptions we used in making

accounting estimates, including those measured at fair value, are reasonable.

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• 6. We have disclosed to you, and the Council has complied with, all

aspects of contractual agreements that could have a material effect

• n the financial statements in the event of non-compliance,

including all covenants, conditions or other requirements of all

• utstanding debt.
• D. Liabilities and Contingencies
• 1. All liabilities and contingencies, including those associated with

guarantees, whether written or oral, have been disclosed and are appropriately reflected in the financial statements.

• 2. We have informed you of all outstanding and possible litigation and

claims, whether or not they have been discussed with legal counsel.

• 3. We have recorded and/or disclosed, as appropriate, all liabilities

related litigation and claims, both actual and contingent, and have disclosed in the financial statements all guarantees that we have given to third parties.

• E. Subsequent Events
• 1. Other than described in the relevant note (Note 5 Events after the

Balance Sheet Date) to the Council’s financial statements, there have been no events subsequent to the period end which require adjustment of or disclosure in the financial statements or notes thereto.

• F. Accounting Estimates
• 1. We confirm the reasonableness of the significant assumptions used

in making the accounting estimates, including those measured at fair value.

• 2. We can confirm that in respect of accounting estimates recognised
• r disclosed in the financial statements:

 That we believe the measurement processes, including related assumptions and models, used in determining accounting estimates are appropriate and the application of these processes is consistent.  That the disclosures relating to accounting estimates are complete and appropriate in accordance with the applicable financial reporting framework.  That the assumptions used in making accounting estimates appropriately reflects our intent and ability to carry out specific courses of action on behalf of the entity, where relevant to the accounting estimates and disclosures.  That no subsequent event requires an adjustment to the accounting estimates and disclosures included in the financial statements.

• G. Expenditure Funding Analysis
• 1. We confirm that the financial statements reflect the operating

segments reported internally to the Council.

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• H. Going Concern
• 1. We have made you aware of any issues that are relevant to the

Council’s ability to continue as a going concern, including significant conditions and events, our plans for future action, and the feasibility of those plans.

• I. Ownership of Assets
• 1. Except for assets capitalised under finance leases, the Council has

satisfactory title to all assets appearing in the balance sheet, and there are no liens or encumbrances on the Council’s assets, nor has any asset been pledged as collateral. All assets to which the Council has satisfactory title appear in the balance sheet.

• J. Reserves
• 1. We have properly recorded or disclosed in the council financial

statements the useable and unusable reserves.

• K. Valuation of Property, Plant and Equipment Assets
• 1. We agree with the findings of the experts engaged to evaluate the

values of the Council's land and buildings and have adequately considered the qualifications of the experts in determining the amounts and disclosures included within the Council’s financial statements and the underlying accounting records. We did not give

• r cause any instructions to be given to the experts with respect to

the values or amounts derived in an attempt to bias their work, and we are not otherwise aware of any matters that have had an effect

• n the independence or objectivity of the experts.
• 2. We believe that the measurement processes, including related

assumptions and models, used to determine the accounting estimate(s) have been consistently applied and are appropriate in the context of the CIPFA LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2017/18.

• 3. We confirm that the significant assumptions used in making the

valuation of assets appropriately reflect our intent and ability to carry out specific courses of action on behalf of the entity.

• 4. We confirm that the disclosures made in the council financial

statements with respect to the accounting estimate(s) are complete and made in accordance with the CIPFA LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2017/18.

• 5. We confirm that no adjustments are required to the accounting

estimate(s) and disclosures in the council financial statements due to subsequent events.

• 6. We confirm that we have performed a desktop review of all assets

not subject to revaluation as part of the 5 year rolling programme

Appendix D for valuations and that each asset category is not materially misstated.

• 7. We confirm that for assets carried at historic cost, that no

impairment is required.

• L. Retirement Benefits
• 1. On the basis of the process established by us and having made

appropriate enquiries, we are satisfied that the actuarial assumptions underlying the scheme liabilities are consistent with

• ur knowledge of the business. All significant retirement benefits

and all settlements and curtailments have been identified and properly accounted for.

• 2. We agree with the findings of the specialists that we engaged to

evaluate the Valuation of Pension Liabilities and have adequately considered the qualifications of the specialists in determining the amounts and disclosures included in the council financial statements and the underlying accounting records. We did not give

• r cause any instructions to be given to the specialists with respect

to the values or amounts derived in an attempt to bias their work, and we are not otherwise aware of any matters that have had an effect on the independence or objectivity of the specialists.

• 3. We believe that the measurement processes, including related

assumptions and models, used to determine the accounting estimate(s) have been consistently applied and are appropriate in the context of the CIPFA Code.

• 4. We confirm that the significant assumptions used in making the

valuation of the pension liability appropriately reflect our intent and ability to carry out specific courses of action on behalf of the entity.

• 5. We confirm that the disclosures made in the council financial

statements with respect to the accounting estimate(s) are complete and made in accordance with the CIPFA Code.

• 6. We confirm that no adjustments are required to the accounting

estimate(s) and disclosures in the council financial statements due to subsequent events.

• M. Other Information
• 1. We acknowledge our responsibility for the preparation of the other
• information. The other information comprises the Narrative Report

included in the Statement of Accounts 2018/2019.

• 2. We confirm that the content contained within the other information

is consistent with the financial statements.

• N. Specific Representations
• 1. There are no specific representations in addition to those above.

Appendix D Signed on behalf of West Suffolk Council We confirm that this letter has been discussed and agreed by the Performance and Audit Scrutiny Committee on 25 July 2019. Signed ………………………………. …………………………….. Rachael Mann Cllr Ian Houlder Chief Financial Officer Chairman of the Performance and Audit Scrutiny Committee Date……………. Date…………….